STOCK NEWS US-Strategists highlight key option trades this week

Real-time equity news [E U]
U.S. stock market report
1036 ET 12Nov2013 Strategists highlight key options trades this week
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Option order flow was muted on Monday, but there was interest to roll out
protection from November to year-end in the emerging markets space, strategists
said on Tuesday. About 640,000 puts traded in the iShares MSCI Emerging Market
Fund on Monday versus 156,000 calls, according to Trade Alert. Shares of
the exchange-traded fund closed at $40.95. One hefty put spread drove the higher
volumes, as an investor was apparently selling 210,950 November $42.50 strike
puts on the EEM for $1.60 and buying 250,000 December $41.5 puts for $1.55 per
contract, said WhatsTrading.com options strategist Frederic Ruffy.

Looking at open interest and trade history, the activity in the November
$42.50 puts appears to be closing a position initiated a few weeks ago when EEM
was trading around $42.55. A new position was opened in the December $41.5 puts.
The position adjustment appears to be expressing concerns about additional
losses for emerging markets over the next six weeks, Ruffy said. "These sorts of
flows typically result in a steeping of EEM skew as put buyers overmatch those
in demand for calls," Credit Suisse derivative strategists said in a report on
Tuesday. Of note was another print for the ETF on Monday where an investor bet
against EEM skew by selling 30,000 December $38 puts to buy 30,000 December $44
calls and collecting 20 cents for the package, CS said.

In equity options, Microsoft Corp continues to attract heavy call
volume as investors digest expected management changes, said Dan Nathan,
co-founder and editor of RiskReversal.com in a report late on Monday. A trader
on Monday appeared to be taking profits by selling the January $33-$36 call
spread, 20,000 times at $2.50 to close a position. In addition, he said there
appeared to be a trader rolling up and out a bullish bet by selling 7,100
November $35 strike calls at $2.56 to close a position and bought February $40
strike calls for 74 cents to initiate a new position.

Chinese Internet company SINA Corp reports earnings after the
market's close on Tuesday and the options market is implying about a 10 percent
move for shares, up or down, Nathan said. The shares have realized an average
move of about 6 percent over the past four quarters. With the stock down 15
percent in the last few weeks since making new two-year highs in mid October, a
trader closed a bullish bet by selling the December $90-$110 call spread at
$1.12, he said. Nathan noted that is appears like an odd sale considering it is
a $20 wide call spread with an upcoming event and over a month to expiration in
a stock that has the potential to make large moves with or without news.

Facebook stock on Monday logged its third straight close below its
50-day moving average and is approaching key near term technical support at $45,
Nathan said. A trader on Monday closed a now seemingly ambitious bullish bet by
selling 12,500 December $60 calls at 19 cents, he added. Call activity
outweighed puts in the stock on Monday by nearly two to one with a total of
287,000 calls to 150,000 puts, Trade Alert figures showed. The most active line
was the December $50 calls with almost 25,000 contracts traded, Nathan said.

Reuters Messaging: doris.frankel.reuters.com@reuters.net

0913 ET 12Nov2013 Total option open interest increases by 3.49 mln contracts
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A total of 12.6 million contracts changed hands in the U.S.-listed options
market on Monday, resulting in net open interest growth of 1.74 million calls
and 1.75 million puts, according to Trade Alert.

0721 ET 12Nov2013-Economic and earnings diary for Nov. 12
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Economic data on Tuesday includes the Chicago Fed National Activity Index, which
edged up in September. The Conference Board's employment trend index for October
is also due for release.

News Corp is the only S&P 500 still expected to report earnings on
Tuesday. D.R. Horton Inc and NRG Energy Inc posted results
earlier in the day.

WASHINGTON, Dec 9 Aetna Inc's chief
executive denied on Friday that its withdrawal from some
Obamacare exchanges was in retaliation for government efforts to
halt its merger with Humana Inc, as he sought to
convince a federal judge to approve the deal.

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